With the proportion of working-age Americans in the overall population shrinking, and the number of elderly rising, the nation is headed for big trouble unless steps are taken soon.

There are nearly 80 million reasons for believing that decisive action on federal debt and deficits should start now. The Census Bureau projects that, by 2040, the number of Americans 65 and older will have climbed to 79.7 million, up from 44.7 million in 2013. That's one measure of the demographic time bomb that will cause an explosion in entitlement spending, which could, in turn, bust the federal budget.

The chart nearby helps explain why the impact of this demographic shock has so far been mild. It tracks the number of...